Don’t Be Jealous Of The “High” Australian Minimum Wage

In the past several years a number of alternative news outlets have pointed out that Australia has a vastly higher minimum wage compared to the United States. In Australia, the minimum wage is set at $16.87 per hour as of 2014. Were they trying to point out that Australians must be enjoying a vastly higher material standard of living when compared to their U.S. counterparts as a result of such generous wages? And that higher minimum wages don’t necessarily correlate to an increase in unemployment?

The latter might be true, but the former almost certainly is not. A higher Australian minimum wage always leads to higher prices for end consumers and overseas visitors. What inevitably follows is the “sticker shock” for people coming from abroad, who suddenly find their Australian holiday isn’t quite as affordable, or enjoyable, as it could have been somewhere else around the globe.

The fact of the matter is, everyday Australians only see the true benefits of their quote-on-quote high minimum wage when the Australian dollar is both performing robustly (it was trading roughly at parity with the U.S. dollar for many years but is now below 90 U.S. cents) and when Australians go overseas on holidays to cheaper countries. That is it.

In fact, I dare say that the United States’ “low” minimum wage of roughly $8.00 per hour actually provides little to no difference to the standard of living of a “high” minimum wage earner of $17.00 per hour in Australia. Need some visual proof?

An All-Star breakfast special at a U.S. Waffle House for $7.09, compared to an Australian breakfast for $15.00. (Double the wage, DOUBLE THE PRICE.)

Not that I’m implying Coca-Cola is a big part of life (it’s actually quite bad for you), but those with a taste for sugar water are clearly better off being in the United States (24 cans for $5) than Australia (almost $33.00 for 30!?).

‘Simpler Times’ beers routinely sell at Trader Joe’s stores across the U.S. for between $3.49-$3.99 a 6-pack. Even when buying in bulk, beer is still incredibly expensive in Australia on a per unit basis.

Here is one of my personal favorites. $55.00 dollars to park for three hours in the city centers of Melbourne or Sydney. How is that $16.87 minimum wage going to work out for you when faced with such extortionate prices!? (click to enlarge)

Let me put it bluntly, high labor and worker rates means the higher costs are transferred to end products and end consumers. That is why everything is so expensive in Australia compared to most other countries. Higher salary rates does not mean everyone get’s richer, because everything accordingly get’s more expensive! Ultimately, it only hurts international tourism to Australia and is making retirement abroad an attractive long-term prospect for Australians who wish to escape the stratospheric cost of living.